Amorim: Portuguese cork exports to hit €1bn by 2017

Head of the world’s largest cork producer, Antonio Amorim, believes that Portuguese cork exports will reach €1 billion by 2017.

Antonio Amorim is chairman of Amorim, the world’s largest cork producer

“I believed that Portuguese cork exports would reach €1 billion in 2020, but now I think they will reach that in 2017,” he told the drinks business during a meeting in Portugal last month.

Continuing, he explained that reaching €1 billion in exports would require Portugal’s stopper business to increase by €100m from €900m today, and, in terms of volume, that would represent a growth of 1 billion corks.

Helping cork reach this target is both increasing wine sales in markets such as the US and China, growing fine wine sales, a surging sparkling wine business and, he hopes, a shift to cork from other types of closure.

“I want us to grow by another 1 billion cork stoppers and I want to get that back from plastics and screwcaps,” he said.

However, he also said that other trends would help the cork business, with US and China both growth areas due to the expanding wine market in these countries, and the fact that both these nations have a preference for cork-sealed bottles.

He also mentioned the growth in sparkling wine demand worldwide, which are products almost entirely closed with cork, while stating Amorim’s dominance when it comes to sealing sparkling wines.

“We bought in 2007 and 2012 the two most important competitors we had in sparkling stoppers and now, without acquisitions, we are growing organically,” he said, referring to Amorim’s purchase of Spain’s Oller Group in 2007 and then, five years later, Trefinos, a holding company with six firms in Spain, France and Italy that produce sparkling wine stoppers.

Speaking about the top-end of the still wine business, he said that volumes were small but growing.

“Last year in Bordeaux they were bottling the 2013 vintage, and they had 30% less volume in the Grands Châteaux, while Burgundy too suffered a 30% volume reduction in the same vintage, so the market for high end corks has not been growing, although it will in the future with the larger 2015 harvest,” he said.

Antonio Amorim believes he can take back the share for cork stoppers from other closure types with innovations like ND Tech, which delivers natural corks with a non-detectable TCA guarantee

However, he stressed the limited nature of this sector. “The market is small at the high end, with Rabobank stating that ‘icon wines’ represent less than 1% of the global market.”

Overall, he said that consumption trends were benefitting cork. “World consumption for still wine is growing around 1.3-1.4%, and 2-2.5% in sparkling wine – mainly due to Prosecco – and the cork industry is growing at 6%, and Amorim are growing more than that: we grew 10% in value in 2015 and this year, till the end of March, we are up 8%.”

Turning his attention to competitor closures, he added, “The market for plastics is declining, it has fallen to 2bn stoppers from 4.5bn in 2006/2007, and it will continue to decline because we have more and better products and plastics are not sexy and have huge problem with oxygen.”

Continuing, he observed, “And the 4.5bn screwcap market is growing very slowly now because Australia is not growing anymore and New Zealand is the same,” picking out two markets where screwcaps are dominant.

Meanwhile, he mentioned the strategic importance of the UK.

“We just have one market to get back and that is the UK, because then we can get back South Africa and Chile, and that’s because they use scewcaps because they are told to by the UK – the UK is a decisive market,” he stated.

Looking back to the company’s strategy since the millennium, Antonio recorded, “In 1999 we asked ourselves, do we get involved in plastics and screwcaps or stay in cork and and invest in R&D; and we decided on the latter.

“When you believe in something you must take it to the end and we think we are working with a unique product on the planet and we believed back then that we could do better – and we’ve seen plastics fall from 4.5bn to 2bn [stoppers], so we think we were right,” he added.

“This is not a finished fight, they are pushing us and we are pushing back… we need to keep fighting,” he said.

The closures market according to Antonio Amorim totals 18bn bottles, of which 11.5bn are sealed with cork, 4.5bn are closed with screwcaps and 2bn use plastic stoppers. He said that Amorim currently holds 23% of this 18bn market for closures.